Labor Market Participants’ Reactions to Salary Range Disclosures

49 Pages Posted: 8 Nov 2023

See all articles by Clara Xiaoling Chen

Clara Xiaoling Chen

University of Illinois at Urbana-Champaign - Department of Accountancy

Victoria Fung

The University of Illinois at Urbana-Champaign

Lisa LaViers

A.B. Freeman School of Business at Tulane

Date Written: October 11, 2023

Abstract

Due to increasing calls to reduce the gender pay gap, many U.S. cities and states have passed or are debating laws requiring salary range disclosures in job postings. We use an experiment to examine the effects of such disclosures on labor market participants’ application likelihood and negotiation likelihood if offered the position. We manipulate pay range disclosure at three levels: no pay range, broad pay range, and narrow pay range. We find that female participants are more likely than male participants to apply to positions with a narrow range compared to no range or a broad range. We also find that female participants are more likely to negotiate salary when pay ranges are present than when they are absent, and that this effect is driven by narrow pay ranges. Results of our study are not only useful for policymakers but also for employers who seek to create more equitable workplaces.

Keywords: pay transparency, pay range, disclosure, gender, pay fairness, job postings, human capital

Suggested Citation

Chen, Clara Xiaoling and Fung, Victoria and LaViers, Lisa, Labor Market Participants’ Reactions to Salary Range Disclosures (October 11, 2023). Available at SSRN: https://ssrn.com/abstract=4599573 or http://dx.doi.org/10.2139/ssrn.4599573

Clara Xiaoling Chen

University of Illinois at Urbana-Champaign - Department of Accountancy ( email )

1206 South Sixth Street
Champaign, IL 61820
United States

Victoria Fung

The University of Illinois at Urbana-Champaign ( email )

Lisa LaViers (Contact Author)

A.B. Freeman School of Business at Tulane ( email )

7 McAlister Dr.
New Orleans, LA 70118
United States
8656172944 (Phone)

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